Dispute resolution through mediation can avoid the uncertainty, cost and rancour of court proceedings, Peter Vinden of The Vinden Partnership
Search the web for long enough and you will be sure to find many scholarly articles and books on the subject of mediation. So why produce another one?
Well, firstly, I wouldn’t describe this article as scholarly. Secondly, too many articles I have read, while being laudable academic pieces of work, are not targeted at the user. This article is, I hope, targeted at users of the process rather than academics and lawyers. I hope it will encourage parties to try mediation, prepare well and hopefully have some success in the process.
British industry employs a significant number of people in dispute resolution. Why would that be? Is it because there are large amounts of money to be earned from parties who can be persuaded to try their luck in the casino worlds of litigation, arbitration or adjudication?
Try asking anybody you know who has been involved in a dispute about his or her experiences. They are likely to tell you four things. One, it cost a fortune. Two, if he or she had known how painful the experience would be, they would not have bothered. Three, he or she wants to avoid a repeat of the experience in the future. Four, when legal costs are taken into account, “winning” may not actually mean that you are financially better off.
So is mediation an answer to this problem? I say it can be and I am not on my own. Even the judiciary is in on the act.
Litigation in this country is governed by Pre-Action Protocols, or rules of engagement to you and me. Within these rules, which came into force as long ago as April 2006, is the following stark warning: “The courts take the view that litigation should be a last resort, and that claims should not be issued prematurely when a settlement is still being actively explored. Parties are warned that if the protocol is not followed (including this paragraph) then the court must have regard to such conduct when determining costs.”
What this statement is doing is to warn parties that if they do not try mediation, painful cost orders may be imposed by the court at the end of a trial. In other words, the courts are sending a clear message that parties would be better advised to try something other than litigation to resolve their differences. That something else is mediation.
Statistics indicate that 80-90% of mediations are successful. Not bad odds when compared with the casino approach.
Let’s face the facts. How many lawyers do you know that can guarantee the outcome of a reference to a legal tribunal? Not many I suspect. I won’t. If 30 years’ experience of dispute resolution has taught me one thing, it is that there can only be one “winner”. There are so many variables that can have a bearing on the outcome of a reference to legal proceedings that I will never do more than speculate on a range of possible outcomes and warn clients that adjudicators, arbitrators and, yes, even judges get things wrong from time to time.
We have a Court of Appeal and The House of Lords in this country, some would say, to allow parties to spend even more of their money on dispute resolution advisers.
At least in mediation, it is the parties that decide the outcome, on terms they are happy with.
So stop gambling and try mediation!
The process of mediation is one of the most common forms of Alternative Dispute Resolution, or ADR. The ‘alternative’ referred to is the alternative to a trial or an arbitral hearing and the process leading up to a trial.
Some may be unaware of exactly what is meant by ‘a mediation’. The following is a simple guide to a process that is a lot less harrowing and expensive than a trial.
Mediation can take place at any time but is better done when all the relevant facts are out in the open. Nobody is going to feel comfortable discussing settlement terms when they are uncertain about some important aspects of the case.
When both sides have their respective positions clear in their own minds, it might be sensible to consider mediation.
A cost/benefit analysis might show how mediation would compare with a trial and how both might compare with settling through solicitors. A trial should be the last resort of a litigant so it is unlikely that the cost/benefit projection will show this as a fruitful route to follow.
Trying to settle by negotiation can take a lot of time and can be nerve-racking and works best only when both parties have decided that dialogue and negotiation through a trusted third party is a sensible way forward. It can take some time for this synchronisation to take place.
By opting for mediation, the parties agree to meet with a readiness to try to find a mutually agreed settlement.
The mediator is sent all the relevant papers by one or both/all of the parties’ solicitors, so that he/she can understand the background to the dispute. The mediator sees the case summaries of the respective legal teams and might make some initial approaches to the parties (or their lawyers, before the mediation) so as to clear up any misunderstandings, obvious queries or inconsistencies.
The mediator should take the opportunity of enquiring as to the parties’ experience of mediation to gauge the amount of help that might be necessary to overcome any anxiety.
Before the mediation, each side decides who shall be present and who shall lead the negotiations. The leader might be one of the party members or might be a lawyer. The team must include someone with the necessary authority to settle the dispute at the mediation.
Before the meeting, the mediator will agree the format of the mediation with both/all parties so that each knows who is going to be present and who has authority to settle.
On the day of the mediation, the parties meet at the appointed venue in their own rooms and the mediator introduces himself. The room is a private one and available to the party for the duration of the mediation.
To commence the mediation, it is customary for the mediator to call the parties together in a third room. The mediator will then emphasise the two senses in which the mediation is confidential. It is confidential as between the mediator and each of the parties and also confidential as regards the outside world. (At some point later in the mediation, the mediator might ask that the confidential views or information of one party be divulged to the other, so as to make progress in the mediation. Only with the tacit approval of the party will the mediator so divulge this ‘confidential’ information.)
The mediator will ask the parties to confirm their respective powers to settle the dispute. The mediator will emphasise that all discussion is without prejudice – meaning that nothing said is binding on the parties until they want it to be, when it is then committed to writing. Up until that time, any offer made can be withdrawn or varied.
The parties are then invited to state their cases briefly – opening statements – and many believe it preferable that this should be done by the parties themselves rather than their legal representatives, as the effect on the opposition can be greater.
Some discussion might continue after the opening statements but it is usual for the mediator to break up the joint meeting and hold private meetings – caucuses – with each party in turn.
The mediator uses his skills to steer the parties towards settlement during the course of the allotted period. The time available might be agreed in advance or be open-ended.
At any time that a party chooses, it can leave the mediation. The mediator will do all in his/her power to prevent this, but this option is always available in any mediation process.
When the parties have agreed a settlement (and, surprisingly, between 80% and 90% of all mediations do reach a settlement), an agreement is drawn up, usually by the legal representatives, for the parties’ signature. The agreement may call for certain actions to be taken, such as payment of an amount from one party to another, but it should settle the matter once and for all without further ado and not least remove the uncertainty of taking the matter to a trial, perhaps winning the case, but then possibly having to fight the whole matter again if the opposing party were to lodge an appeal.
The mediator is usually paid in advance by both parties and his fee will either be in the form of a lump sum or on an hourly rate depending on the size and complexity of the dispute.
Peter Vinden is a practising arbitrator, adjudicator, mediator and expert. He is chief executive of The Vinden Partnership and can be contacted by email at email@example.com.